12 July 2000

Mr. Rene Q. Bas

Enthusiasms

Manila Times
Level 7 & 8 Maria Natividad Building
T.M. Kalaw corner Cortada Streets, Ermita Manila City

Dear Mr. Bas,

Good day sir!

First of all we in the United Filipinos in Hong Kong would like to thank you for publishing our position paper on OWWA Resolution 99-016, increasing the frequency of the so-called OWWA "contribution".

There are several points that we need to elaborate and question about the OWWA pronouncement justifying the coming out of the said Resolution. But first, allow us to state that what they say, especially in paper is not necessarily the truth. In practice, you can hear numerous complaints from migrant workers about the very poor services of OWWA.

Whenever one seeks assistance form OWWA personnel abroad, their first automatic answer is there are no sufficient funds or that the money is in Manila. Thus when we got hold of the OWWA budget (and this is our main contention) it explained everything to us. In reality, only P72 million is allocated for direct benefits and programs.

To facilitate mutual understanding on the said points of contention, we are forwarding to you the copy of the OWWA budget allocations for the year 2000. We were wondering whether the OWWA reply that they sent you was culled from the same approved budget allocation.

Now, to continue with other points that we want to raise:

1. OWWA is quoting LOI 537 and PDs 1694 and 1809 to explain their side. But indeed, there is a more important matter in this regard. The PDs and LOI, as they mentioned, should collect the contributions from the employers and not from the workers. Do they mean that as long as they can collect, even if it is in violation of the said LOI and PDs, it is fine? Or does it just show that the very government that promulgated these laws is inutile for they can't even implement their own laws - i.e. collecting the contributions from the employers? We have also repeatedly quoted Article V, Section 8 of RA 8042 regarding Government fees and Administrative Costs. And surely, this planned OWWA annual mandatory fee is illegal. On top of this, they are making this OWWA contribution to the so-called trust fund a forced fee, a "condition for employment". Where is the merit in that? We are gladdened by how the Manila Times Editorial last July 9 has captured this sentiment.
2. We have been rigorous with our statistics and the truth behind the numbers game, which the OWWA uses to muddle the issue.
1. Based on the OWWA 2000 budget, their projected income on fee collection will amount to P547, 108,439.74. If we will divide this by US$25 (converted to peso at 41 during the time the budget was made), the total number of OFWs will reach 533,764 and not 450,000 as they claim. But in fact, according to the POEA figures, 837,020 were deployed in 162 countries in 1999 (Today, May 3, 2000). So their projection is quite conservative if not misleading. They are poised to collect (since the OWWA fee is a "condition for employment") not less than P 857,945,500 for the year.

But do take note that this is still their estimate and projection even before the controversial resolution was approved. This projection is based on the existing OWWA Memorandum of Instruction No. 8 that seeks to collect US$25 on a per contract basis. The actual impact of the Resolution has not yet been factored into the approved budget for 2000. We can expect, therefore, a ballooning of collections when the OWWA Resolution takes effect on January 1, 2001.

2. Why is this so? First, the OWWA Resolution will collect the annual fee NOT ONLY from the newly hired or processed overseas workers BUT MORE SO from those already working abroad. On top of this, it is MANDATORY. In Hong Kong alone, there are 146,000 domestic helpers (March 2000 figures of the HK Immigration Department). With the very efficient collection system of the Philippine Consulate in HK, the collection would be HK$ 29.2 million (146,000 x HK$200) or P 160 million for one year.

We wonder where the OWWA gets the figure of 1.4 million overseas Filipino workers. With the actual figures of the POEA and other government agencies, notwithstanding the independent researches of credible NGOs, this estimate of the OWWA is totally ridiculous.

3. Another point of contention was what Amado Gat Inciong mentioned in his column that P336 million goes direct to services for OFWs such as insurance, accidental death burial expenses, repatriation assistance and a reintegration program. I wonder if OWWA provided you the real budget. In our meeting last June 25, here in Hong Kong with OWWA Deputy Administrator Virginia Son and the Director of OWWA Budget and Finance department, Marianito Roque, neither of them denied the budget that we presented.

We still maintain that the budget allocation for "direct services" only amounts to P72 million or 11% of the total OWWA budget of P629 million. Why is this so?

1. Direct services, from the migrant workers point of view includes Items 1.A.2 (Airport Assistance), 1.B. (Insurance and other Financial Benefits) and 1.C.2. (Overseas Program Funds under the category of On-Site Services) and 1.F (Legal Services). The sub-total is P 72 million.
2. Other services which are under Items 1.D., 1.E, 1.G (that are not on-site and which we term as Indirect) and Item 2 (Special Projects and Programs) amount to P114 million. These do not address directly the welfare needs of distressed overseas workers and yet the budget is greater than the abovementioned category.
3. Director Roque, during the dialogue, even corrected us that by saying that Service Delivery Costs actually amounts to 45% which is in reality Administrative Costs that amount to P270 million.
4. The OWWA allocates a total of P190 million for On-site direct services. But what they do not admit is that P170 million of this goes to overseas allowances and other operational costs. They already have a 45% allocation for "Service Delivery Costs" (which encompasses wages, allowances and operations both in the Philippines and overseas) yet they even hid another 27% for on-site administrative and operational costs and called it part of On-site services. This is a malicious way to double the take. So in fact, administrative, operational costs take on P441million (70%) out of the total OWWA budget of P629 million.
5. Another point is about repatriation. RA8042 Article XV Sec 59 provides for P100 million emergency repatriation fund. However, this amount is nor freely given by the OWWA. Rather, OWWA simply advances the cost of repatriation but simultaneously, the POEA shall "ask the concerned (recruitment) agencies to work towards reimbursement of cost advanced by the OWWA." Therefore, this 100 million is NOT part of the budget of OWWA. And it is not even given by OWWA or the government but is taken supposedly from recruitment agencies. Repatriation is not a responsibility of OWWA or government but is now borne by private recruiters. This is part of the government’s deregulation package for overseas workers.
6. The Medicare, contrary to popular belief, IS NOT part of the benefits provided for under the US$25 OWWA contribution. In fact, it is a separate collection amounting to P900. Also, it is mandatory.

The main issue (which their own figures show) is that a large chunk of the OWWA Budget goes to their own operational expenses. Even if they increase the collection, the allocation and share of migrant workers will remain at the most only 30% (granted that we include Indirect services) of the so-called "trust fund". Why then should those who are managing the "trust fund" get a bigger share of the pie than those who are supposed to directly benefit from it and who pays for it? Each member of the Board of Trustees gets a per diem of P5,000 for a one day meeting every month on top of the salaries that they get from their respective government departments.

You and your colleagues have already mentioned that from the very beginning, the OWWA was designed to be a "self-sustaining workhorse". This means that the services it renders come from the OFWs themselves. Where then can we find the government allocation for services to its so-called New Economic Heroes? The capacity of any government to provide social services to its constituents largely rests upon its income generation from taxation. The fact that there are no free services from government for overseas Filipinos and no budget allocations for such, then these OWWA fees are taxes – no more, no less - levied on OFWs.

Who says that OFWs are actually tax-exempted under law? OFWs are the top dollar earners, remitting more than US$ 8 billion, yet we are paying so many fees to the government like authentication fee of HK$255, affidavit of HK$170, POEA of US$100, agency fee, NBI clearance, medical, Medicare etc. Still, the government keeps on inventing schemes, in the pretext of providing or improving its services to us but actually collects (extorts) money from us.

And then, it is more frightening to hear that the cost of social services should be borne by those who need it instead of being provided responsibly by the Philippine government. It is frightening how the mentality of "users pay" and privatization takes precedence over public service, welfare and social protection.

We hope this would clarify our stand on the matter. And in fairness, we hope that you will publish this rejoinder in your column.

Thank you very much.

Sincerely,

(Sgd.)

Connie Bragas-Regalado

Chairperson

Executive Committee